Discounted Cash Flow (DCF) Calculator
A full 10-year discounted cash flow (DCF) model: build ten years of revenue, margins, capex and working capital into unlevered free cash flow, then discount it. Free, no sign-up, with the formulas shown. Inputs stay in your browser.
Change one input at a time and watch what moves. That's how you learn the model.
DCF valuation (full)
Build ten years of revenue, margins, capex and working capital into unlevered free cash flow, then discount it.
Learn more: what is a full DCF, how to read it and common mistakes
What is a DCF valuation?
A full discounted cash flow model builds the cash a business generates from the ground up, year by year, and then works out what that cash is worth today. You start with revenue, apply a profit margin to get EBITDA, take off tax, add back non-cash depreciation, and subtract the money spent on equipment (capex) and on extra working capital. What remains is unlevered free cash flow: cash available to all investors, lenders and shareholders alike. Ten years of it are discounted at the WACC, and a terminal value captures everything after year 10.
When do you use it?
The full DCF is the standard "intrinsic value" method in equity research and M&A. A buyer uses it to decide how much it can pay for a target; a private equity fund uses it to check its entry price beyond the LBO maths.
How to read the output
Take the fictional Northfield Instruments case (load it from the worked examples). Free cash flow grows from 151 to 302 over ten years. Those ten years are worth 1,332 today and the terminal value 1,934, giving an enterprise value of 3,266. After net debt of 500, equity value is 2,766, or €27.66 per share.
Two checks tell you whether the answer is reasonable. Terminal value % of EV is 59% for Northfield, which is typical; above 80% the result depends mostly on the far future. Implied TV/EBITDA converts the terminal value into a multiple of year-10 EBITDA (8.5x here). Compare it with what similar companies trade at: if your terminal value implies 20x for a mature industrial firm, something is off.
The 5×5 sensitivity table moves WACC two points either way (rows) and terminal growth one point either way (columns). For Northfield, value per share runs from about €18 (11% WACC, 1% growth) to about €51 (7% WACC, 3% growth). Small changes in the discount rate matter a lot.
Common mistakes
- Terminal value carrying the whole valuation. If it is above about 80% of EV, test it hard and compare the implied multiple with peers.
- WACC lower than, or very close to, terminal growth. The formula breaks down; the calculator blocks it.
- Capex below D&A forever. A growing business usually spends at least as much as it depreciates. Very low capex inflates cash flow.
- Mixing units or entering 0.08 instead of 8. Percentages are plain numbers (8 means 8%), and money and shares share one unit.
Limitations
Growth, margins and cost ratios are constant for all ten years, with no gradual fade to a mature state. The model ignores leases, pensions, minority interests, stock-based compensation and the timing of cash within each year (it discounts at year end).
FAQ
- Why add back D&A?
- Depreciation lowers taxable profit, but no cash leaves the business. The actual spending is captured by capex.
- What does the NWC input mean?
- The cash tied up in stock and unpaid customer invoices per unit of extra revenue. At 10%, each 100 of new revenue absorbs 10 of cash.
- Why is year 11 shown?
- The terminal value is based on a year-11 cash flow built at the terminal growth rate, so its working capital need is consistent with slower growth.
- Simplified or full DCF?
- Use the simplified one for a quick check, the full one when you want to see and argue about each driver.
Educational use only. Not financial advice. Exact formulas: see the Methodology page